Milad, who has run La Perla Restraurant on Hangingroyd Lane for 12 years, said: "My neighbour rang me and said the building was on fire.
"I came down at about 2.45am and it was burning. The whole building has burned down.
"I am gutted. It's heartbreaking."
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He said the popular restaurant had recently undergone a complete refurbishment.
The Italian eaterie has posted on social media: "Dear friends! This morning we woke up to terrible news. The restaurant is still experiencing a fire.
"There is a lot of damage, but luckily nobody was hurt.
"Thanks to the fire brigade the fire is now being put out.
"Due to the unexpected circumstance we won't be opening but we will make sure to keep you all updated.
"Thank you for your kind messages of concern - it means a lot to us!"
The restaurant's customers have been posting messages of shock and well wishes.
They include Gordon Rigg Garden Centre in Todmorden, who were hit by a blaze last month, who posted: "So sorry to hear this! Having just been through this we know how devastating it can be. Glad nobody was hurt and wishing you the best for the future."
Firefighters were called to the blaze at 2.12am today, with people reported in the building which houses Burlees House offices and La Perla.
The fire service's latest update says everyone has been accounted for.
Firefighters are still at the scene and people are being asked to avoid the area.
Twelve people had to be evacuated from their homes because of the smoke.
Hebden Bridge Group Practice has re-located all planned face-to-face appointments to Grange Dene Medical Centre in Mytholmroyd.
Hebden Bridge Town Hall has been opened up for people affected by the blaze.
Mayor of West Yorkshire Tracy Brabin has shared her thanks to the emergency services and Calderdale Council.
"Time and again our emergency services run towards danger, protecting us all. Thank you for your service.
"Thank you too Calderdale Council and councillors supporting those evacuated from homes, worried about businesses as well as keeping public informed. Stay safe all."